AGL 37.89 Decreased By ▼ -0.26 (-0.68%)
AIRLINK 124.10 Increased By ▲ 2.59 (2.13%)
BOP 5.67 Decreased By ▼ -0.18 (-3.08%)
CNERGY 3.75 No Change ▼ 0.00 (0%)
DCL 8.55 Increased By ▲ 0.15 (1.79%)
DFML 40.48 Decreased By ▼ -0.41 (-1%)
DGKC 87.10 Increased By ▲ 2.50 (2.96%)
FCCL 33.98 Increased By ▲ 1.28 (3.91%)
FFBL 66.01 Increased By ▲ 0.51 (0.78%)
FFL 10.20 Increased By ▲ 0.15 (1.49%)
HUBC 104.45 Increased By ▲ 0.65 (0.63%)
HUMNL 13.45 Increased By ▲ 0.20 (1.51%)
KEL 4.78 Increased By ▲ 0.35 (7.9%)
KOSM 6.84 Decreased By ▼ -0.25 (-3.53%)
MLCF 38.84 Increased By ▲ 1.34 (3.57%)
NBP 60.35 Increased By ▲ 0.10 (0.17%)
OGDC 179.65 Increased By ▲ 7.40 (4.3%)
PAEL 24.97 Increased By ▲ 0.17 (0.69%)
PIBTL 5.71 Increased By ▲ 0.01 (0.18%)
PPL 153.00 Increased By ▲ 11.31 (7.98%)
PRL 22.79 Increased By ▲ 0.07 (0.31%)
PTC 14.91 Increased By ▲ 0.17 (1.15%)
SEARL 66.85 Increased By ▲ 2.29 (3.55%)
TELE 7.01 Decreased By ▼ -0.13 (-1.82%)
TOMCL 35.70 Increased By ▲ 0.20 (0.56%)
TPLP 7.32 Increased By ▲ 0.03 (0.41%)
TREET 13.99 Decreased By ▼ -0.21 (-1.48%)
TRG 50.95 Decreased By ▼ -0.80 (-1.55%)
UNITY 26.40 Decreased By ▼ -0.20 (-0.75%)
WTL 1.23 Increased By ▲ 0.01 (0.82%)
BR100 9,717 Increased By 233.5 (2.46%)
BR30 29,237 Increased By 866.2 (3.05%)
KSE100 90,860 Increased By 1893.1 (2.13%)
KSE30 28,458 Increased By 630.4 (2.27%)

India's gold demand in the March quarter is set to drop by about two-thirds from a year ago to its lowest in seven years, as higher prices and a strike by jewellers curbed sales in the world's second-biggest consumer, retailers and analysts said. The sluggish demand could weigh on global prices, which are headed towards their biggest quarterly gain in nearly 30 years, but will help the country bring down its trade deficit.
Two-thirds of India's gold demand comes from villages, where jewellery is seen as a mode of investment and wealth creation. Rural demand is slack after the first back-to-back drought in nearly three decades squeezed farmers' earnings. In the March quarter, India's total gold demand is expected at 60-70 tonnes, the lowest since the first quarter of 2009, when local purchases totalled 41 tonnes, said Sudheesh Nambiath, a senior analyst at consultancy Thomson Reuters GFMS.
In the first quarter of 2015, consumers bought 179.5 tonnes. "The spike in gold prices, drop in the earnings of farmers due to bad weather and the jewellers' strike pulled down demand," Nambiath said. Despite offering record discounts, traders were struggling to clear inventories, said Daman Prakash Rathod, a director at MNC Bullion, a wholesaler in India's southern city of Chennai.
The discount hit a record $53 an ounce to the global spot benchmark in late February. Many buyers have also turned sellers to cash in on higher prices. On February 11, Indian gold futures touched 29,251 rupees (about $428) per 10 grams, hitting their highest level in nearly two years. Indian jewellery sales have fallen since the start of the year, hit by higher gold prices and delayed purchase decisions by consumers, who had hoped the national budget would cut an import duty of 10 percent.
But Finance Minister Arun Jaitley surprised the market by maintaining the level and imposing an excise duty on jewellery sales from March 1. Jewellers went on an indefinite strike since the start of the month to protest the reintroduction of a sales tax on gold jewellery after four years. The strike was later called off on assurances by the excise department that it would not "harass" jewellers over collection of a new tax. Although the national level trade bodies of bullion dealers and jewellers called off the strike on March 19, various regional industry associations decided to continue with it until the government rolled back the tax. "Demand will improve in the next few weeks if this strike ends," said Harshad Ajmera, proprietor of JJ Gold House, a wholesaler in the eastern Indian city of Kolkata. "Consumers have to buy for the wedding season."

Copyright Reuters, 2016

Comments

Comments are closed.